CBE clears multibillion-dollar backlog of FX requests: official

Egypt has cleared a multibillion-dollar backlog of foreign-currency requests from importers and foreign companies since floating the pound in November, a central bank official told Bloomberg, the latest sign that the economy is recovering from a paralysing dollar shortage.

The banking system is also meeting new foreign currency requests without delay, the official added on condition of anonymity.

The bank shared previously unpublished data with Bloomberg, showing that $1.5bn in pending requests from multinationals to transfer to mother companies or pay suppliers have been cleared.

Some $552m has been made available to foreign companies seeking to remit dividends.

In total, $49bn of trade-financing transactions were executed between the flotation of the pound and August, the official said.

The figures add to growing evidence that Egypt’s external finances have improved since it abandoned most currency controls in November as part of a sweeping economic program that helped clinch a $12bn loan from the International Monetary Fund.

Central bank reserves have almost doubled to $36bn in July. International investors have poured billions into Egyptian local-currency debt.

Foreign companies and importers had struggled to obtain dollars since the 25 January Revolution, which drove away foreign investors and tourists.

The CBE official added that the increased availability of foreign currency in the banking system had boosted trading on the interbank system, which got off to a slow start due after the flotation due a severe lack of liquidity, as some banks were now selling their surplus dollars through it.

CBE governor Tarek Amer told Bloomberg on Wednesday that the interbank system was “active and working well.” He added that about $9bn had been traded since the currency was floated.